Law of Contract: Breach
Liability for Breach
Liability for breach of contract is generally strict, but it may also be is based on some misconduct or fault, such as fraud, want of due care or due diligence.
Strict contract
Depending on a standard of duty which a party has agreed to assume under the contract he may find himself liable for breach even "without what one might call fault on their part". Duties of this kind are strict and were described by Lord Edmund-Davies in Raineri v Miles [1981] AC 1050 at 1086 as below:
It is axiomatic that, in relation to claims for damages for breach of contract, it is, in general, immaterial why the defendant failed to fulfil his obligation, and certainly no defence to plead that he had done his best.
Examples of strict liabilities are: duty of the seller to make delivery, duty of the buyer to pay price for the goods, duty of the charterer to provide cargo and duty of the shipowner to provide a seaworthy vessel under the common law. Some obligations not absolute under the common law can be made strict by express provisions in contract, e.g. charterers’ obligation to pay hire in advance. The general rule is that liability is strict.
Duty to exercise due care
Where a contract provides for supply of services only, such for example as solicitors, architects or doctors, where no guaranteed results possible to achieve, it is usually imposes duty of care only. This standard of duty limits person’s undertaking in performing his services to one of exercising of reasonable care and skill. A suitable example can be found in section 13 of the Supply of Goods and Services Act 1982 which states:
In a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.
In instances when risks of negative outcome is very hard to ascertain a duty to exercise reasonable care and skill can be discharged even when services provided resulted in dramatically negative results. This is so, because it was held that to establish negligence it is insufficient to rely on the doctrine of res ipsa loquitur, but exceedingly strong evidence would be required.
See also Concept of Due Diligence
When failure to perform is not a breach
There is no breach committed when someone buys a theatre ticket but does not go to see performance. This is an example of so-called unilateral contract, i.e. a contract in which one side, in our case a person who bought a ticket, does not make any counter-promise to act, i.e. fact of a ticket purchase does not attach an obligation to attend the performance, it is therefore at purchaser’s discretion whether to go to there or not.
In case of bilateral contract, which is exchange of counter-promises constituting mutual obligations, some failures expressly excluded from the scope of one or both parties’ duties. A good example of such provision is well known ‘mutually excepted’ clauses in bill of lading and charterparty contracts. Apart from the said failures a non-performance can be excused when it is lawful. For instance, when the buyer lawfully rejects the goods because they are defective, and refuses to pay for them, he is not in breach of contract. A prior breach of contract by the seller automatically discharged him from his obligation to pay price for the goods, unless he elects to accept them.
In yet another category of cases when without fault from either side a supervening event brings the contract to an end, the parties may be excused from further performance under the doctrine of frustration.
Finally, there are cases where performance prevented by an event specified in so-called "force major" clause. The party relying on this provision should commit no fault and event occurred should be beyond of control of this party.
Previous: Contract | Next: Damages
Leave your questions and comments here
Although author encourages visitors to leave their comments using this form, but should you be unable or unwilling to use it for any reason you can mail to info@lawandsea.net to contact with him.